DENVER — After nearly a decade of anemic appreciation, home prices across America are on the rise, fueled by strong demand and lessening supply, according to the State of the Nation’s Housing study by the Joint Center for Housing Studies of Harvard University released Wednesday during the 51st conference of the National Association of Real Estate Editors (NAREE) in Denver.

Chris Herbert, the Center’s managing director, also told NAREE attendees that the number of distressed homeowners has fallen sharply, further helping the nation’s housing industry.

Nominal prices were up last year in all but three of the nation’s 100 largest metropolitan areas, the Center’s researchers found. The longer-term gains in real prices varied widely across the country, Herbert added, with some markets experiencing home price appreciation of more than 50 percent since 2000, while others posting only modest gains and even some declines.

“Last year, home price finally reached back to their peak,” said Herbert. “This is important because of the fact that a lot of people who bought or refinanced homes during the peak found their homes under water, So we’ve gone from 12 million homes to 3 million homes under water, and that’s freeing up a lot of capital.”

However, only 41 of the largest metropolitan areas have reached their past peak, another 32 of the markets are 15 percent below their peak, Herbert said. “It all depends where you are in the country and what neighborhood you are,” he continued. “Low-income neighborhoods are less likely to have returned to their housing peak.”

The cloud on the horizon for those who want to buy a home is reduced supply. “While the recovery in home prices reflects a welcome pickup in demand, it is also being driven by very tight supply,” Herbert said, noting the U.S. added less new housing over the last decade than in any other ten-year period going back to the 1970s. “Any excess housing that may have been built during the boom years has been absorbed and a stronger supply response is going to be needed to keep pace with demand—particularly for moderately priced homes.”

One reasons we’re seeing house prices go up so sharply is that housing inventories are very tight,” Herbert said. At the end of last year, the supply of homes was at the lowest point in decades, 1.65 million homes for sale, a 3.6-month sales supply.”

For many citizens living along the West Coast, in Florida and in the Northeast, homeownership is difficult because of high home prices, said Daniel McCue, a senior research associate at the Center. On average, the study found, only 45 percent of renters in America’s metro areas could afford the monthly payments on a median-priced home in their market area. But in several high-cost metros of the Pacific Coast, Florida, and the Northeast, that share is under 25 percent.

On the multifamily side, rents continue to rise. The study found the rental vacancy rate hit a 30-year low last year and rent increases continued to outpace inflation in most markets. In San Francisco and New York and a few other large metros, though, rental rate growth slowed.

Millennials are expected to rise to the rescue of the housing sector, the study predicted, as millions of millennials move into their late 20s and early 30s. The push by millennials will increase the demand for both rental housing and entry-level homeownership in cities, suburbs, and beyond. “Meeting this growing and diverse demand will require concerted efforts by the public, private, and nonprofit sectors to expand the range of housing options available,” says McCue.

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Texas-based RealtyNewsReport.com covers regional and national news of significant trends and transactions in commercial and residential real estate. The publication was founded by Ralph Bivins, an award-winning journalist with extensive experience in print, broadcast and online media. Bivins recently received a number of awards in the 66th Annual National Association of Real Estate Editors Journalism Competition.